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State accuses 14 daycares of fraud, pulls funding


An unprecedented fraud crackdown has led Ohio officials to cut off payments to 14 child care centers since October — including one in Dayton and five in the Cincinnati area — for allegedly charging the taxpayer-funded program for children not in their care.

These centers are accused of overbilling the state a combined $154,590, according to records obtained by this newspaper. Records also indicate there are 190 open investigations across the state.

This follows years of historically lax oversight in the program that costs taxpayers about $700 million a year to provide subsidized child care to about 105,000 children so their low-income parents can work.

Joel Potts, director of the state organization for directors of county job and family services departments, said it was “common knowledge” among providers that fraud was not being investigated.

“Basically, the jig is up,” he said. “I feel a lot better about where we are in the system today versus two years ago.”

Aunt Connie’s cut off

In Dayton, Aunt Connie’s Learning academy on Salem Avenue was sent a letter last month saying its state funding will be cut off by May 25 and the 28 children who attend under a subsidy will have to go elsewhere.

The state’s investigation of Aunt Connie’s started in December with an allegation the center was holding on to kids’ state-issued ID cards — which is not allowed — and swiping for them when they weren’t there.

The state looked at a three-month period and found that nearly a third of the time a child’s card was swiped for billing, attendance records showed the child wasn’t there. The center was ordered to pay back $10,709 of the $259,885 it has received from the state since the beginning of 2012.

Owner Connie Brown could not be reached for comment. Investigators noted that she did not cooperate with their review.

Dennis Yazell, building administrator for the Mack Memorial Church of the Brethren, where Aunt Connie’s rented space, said he knew nothing of the investigation. He said he hadn’t seen children there since before Christmas and he thought the facility was being renovated for expansion.

Yazell said he wasn’t surprised at the allegations, though, considering the rough neighborhood in which the church is located.

“It’s a shame they have to do it,” he said of the number of centers de-funded.

The 14 centers accused of fraud were cut off from state funding but can still operate as private child care centers. They received nearly $2 million combined in state funding since the beginning of 2012.

State officials said they were in the process of revoking Aunt Connie’s license for health and safety issues, as well, when she shut down and sold the center. The new owners kept the same name and may reapply for state funding.

4 investigators assigned

Ohio Department of Job and Family Services officials say the increased enforcement started in 2012. That’s when the state spent $6 million centralizing its payment process and replacing paper records kept by the centers with cards swiped by parents when dropping off or picking up their kids.

Oversight of the program also transitioned from counties — who monitored centers for safety, but put little emphasis on fraud — to a newly created four-member fraud unit in Columbus.

“In Columbus we get near-real time records of all of the children around the state receiving publicly funded child care,” said ODJFS spokesman Ben Johnson. “These four state employees do nothing but monitor time-and-attendance records, look for potential fraud. If they see potential fraud or if they receive a complaint … they visit the center (and) they can pull additional records.”

In addition to shutting down centers suspected of fraud and demanding they repay the money, Johnson said they refer cases to local law enforcement to weigh criminal charges. There have been 34 investigations closed with either no wrongdoing found or something minor that was ordered to be corrected.

Johnson said fraud takes several forms.

“They may be swiping in for 30 kids on a day they’re actually only caring for five kids. They may be swiping in for a smaller number of kids on a day that they’re closed, or maybe they’re fudging the hours and swiping in for children at 6 a.m. when they don’t actually arrive until 8 o clock in the morning and trying to bill the state for an extra couple of hours each day.”

Johnson and Potts said they expect the number of fraud findings to decline as word gets out the state is watching.

“It’s important for providers to know that we’re watching … taxpayer money very closely,” Johnson said. “And if they bill for service they did not provide we will at the very least look to collect that money and we will remove them from the program if warranted.”

Staff Writer Andrew J. Tobias contributed to this report.



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